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Saturday, January 26, 2013

Devaluation, NEP, elections and jail murders in Cubazuela

It looks like things are coming to a head for the regime. Alleged Vice-president Maduro traveled to the seat of the Venezuelan government in Havana for a day to collect a few signatures from Chavez, in red ink appropriately since they seem to be designed to face the economic troubles ahead. From what Maduro said on his return tonight we can only surmise that the situation is difficult, that the devaluation camp has won (exit Giordani?) and that Maduro is supposed to bring a conciliatory message to the private sector of Venezuela, barely a couple of days after he said that he would never talk to them.

Is there a NEP like temporary reconciliation between a sinking regime and the cold remains of the private sector to avoid total catastrophe? Or at least starvation? Apparently we will get fixed within a few hours.

However today we also learned that the CNE has once again postponed the council/mayor elections to July 14. Certainly, the CNE does not show signs of coping well with these rather complex elections and the gerrymandering seems to be more difficult to do than expected (there is a need to redraw the council member circuits of 300+ districts, about an average of 3 to 5 circuits per district...). But I am sure that it is not all behind that announcement and I am willing to bet that it means presidential elections before June 1.

Indeed, elections by June 1st is the only thing that makes sense. By playing footsie suddenly with the private sector the regime is clearly looking for a pressure valve to the food scarcity problems it is unable to solve. It may be as simple as allowing private business to import and distribute fast enough food to calm down the populace until elections are held.

The devaluation is more than likely going to be the formalization of a two tier exchange rate, the least politically damaging for the regime. One low, say, 6 VBF for the dollar for food stuff and medicine, and one floating starting at 8 for the rest, making a revamped SITME the floating exchange rate for all purposes. This way the regime can hold for 6 months until it brings the VBF to a more real rate at around 10 VBF per USD. By then, hopefully Maduro is president (or Chavez back in office, all is possible since he apparently can sign checks again).

Now, what are the political scenarios? If indeed the regime devaluates within the next two weeks, then this means that Chavez dies or resigns so that elections can be held in March, before the full impact of the devaluation hits. Once Maduro in office, the PSUV strong with three victories in a row, even if gained on fraudulent premises, can face a primary like process in May for the July elections.

Also and again, it is possible that Chavez comes back, even if ill, even for a few months at most. But he needs to secure his succession and as such has a devaluation take place while away so as not to be blamed for it. Yes, in Venezuela the chavista lumpen can buy that.

Whatever variation of the above the scenario is, today we all got reminded that all can change very fast as the country is clearly crumbling, faster than expected. Food shortages are not only not improving, but other disasters are joining in. The Uribana jail was taken by assault by the Nazional Guard and at this hour more than 50 inmates have been killed while scores are hurt. The regime finds nothing better to accuse Globovision of having warned the inmates by announcing a search operation this morning. Really.... As if the inmates did not see the gathering of security forces, as if their relatives camping outside did not warn them of what was coming, as if the presence of these weapons inside Uribana was not already because of Nazional Guard sectors trafficking in drugs and weapons in jails....

Whatever best plans are laid down, Uribana reminds us in all its gory horror that the country has entered a dangerous phase of instability. Never until today the regime gave so many signs of weakness at once.

3 comments:

Poor Venezuela. I just can't see a fruitful exit from this mess in the short or medium term. History will not look well at the opposition forces at least with their showing up to this point. Rayma's recent comic strip from a few days ago that you published can't be more relevant....

Money Quote from Anderson's Slumlord recently published in the New Yorker: "Corruption in the security forces was a deep seated problem, Barreto told me --the real source of the country's criminal culture...The situation, Salvador [a leader of the Colectivo Alexis Vive at the 23 de Enero] said, stemmed from Chavez's inability to take on the real criminals: "Chavez hasn't gone against the malandros because he believes they can go against him."So, according to the Alexis Vive group, the real malandros are the corrupt security forces. Armed prisoners point to corrupt security forces. Cleaning up the prisons is a move against those forces. The army is being used to take control of those forces. Who is guiding this effort? Radicals following the Alexis Vive ideology? Reminds me of Barreto replacing much of the police force with members of the Tupamaros when he was major of Caracas. In other words, this is not just a clean up operation against prisoners, but a move against a certain powerful group within the security forces.That the gvt. is now considering inviting back the DEA is part of the same effort.

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